REPORT 2008

To Shareholders and Investors
Business Report for the 75th Term
From April 1, 2007 to March 31, 2008

Securities identification code: 6455

TOPICS

Morita Topics
Fire fighting ambulance（rear carry-in/out type）

In recent years, with the aging ofsociety

andthedecreaseinhousehold size, the frequency ofambulance mobilizations has been
increasing and we are experiencing
a growing shortage of ambulances.
As a result, actions such as mobilization of fire fighting vehicles to calls
before mobilization of ambulances have been taken. To respond tosuch circumstances, Morita announced the world's firstambulance

fire fighting

as a concept vehicle in 2002.

Subsequently, the company worked on development of a commercially
viable fire fighting ambulance, and in 2005, it delivered its firstcommercial model to Matsudo City in Chiba Prefecture. Following
delivery to Matsudo City, we have received inquiries for our firefighting ambulance from a number of municipal governments
throughout Japan, and delivered the vehicle to local governments
including Kita-kyushu City, Obihiro City and Fukuoka City.
In March 2008, we developed a new fire fighting ambulance model thatenables the crew to carry patients in and out from the rear door, anddelivered it to Mutsu City in Aomori Prefecture. While the first model
delivered in 2005 had a patient entrance on one side of the vehicle, the
new model has the entrance at the rear. This design change allows thecrew to work safely on narrow streets and heavily congested roads.
The internal emergency medical space measures 1.75 m in height and01

REPORT 2008
2006

TOPICS

1.67 m in width, which is larger than that of the first model.
This emergency medical space can accommodate up to seven people:
three (technicians and an attendant) on the side, one (technician) in thefront, and three in the driver's seat, the assistant's seat and the patient's
space.
In addition, use of a vibration-isolated bed reduces vibrations while thevehicle is traveling.
Furthermore, the vehicle is equipped with an A-2 class water pump on
the left side to ensure a water discharge capacity of 2,000 liter or higher
per minute at 0.85 Mpa. Since this capacity is equivalent to that of themost common pumper in Japan, the new fire fighting ambulance is
expected to play a more active role in future as one of the solutions toproblems that the Japanese fire fighting system faces.

ＲＥＤＳＥＡＧＵＬＬ
The multifunctional type fire fighting vehicle

REDSEAGULL

iscapable of opening its doors (3 doors) just like the gull wings of a supercar. The name

REDSEAGULL

is derived from its shape with the

opening doors looking like the outspread wings of a seagull. Because ofthis innovative design and enhanced functions, the new fire fighting
vehicle is also called asuper fire fighting vehicle.

Recently, the number of requests for fire departments/stations toprovide rescue activities in natural disasters in addition to fire fighting
activities has been increasing, and expectations for what fire fighting
vehicles can do are becoming more diverse.
REPORT 2006
2008

02

TOPICS

Given this tendency, the Japan Firefighters Association held acompetition for development of new types of fire fighting vehicles thatwould allow volunteer fire corps to perform emergency life saving
activities in addition to fire fighting activities. The competition wasmade possible by support of the Japan Lottery Association.
REDSEAGULL

enables the customer to freely rearrange the layoutof shelves by selecting rescue equipment from a broad range of options
including a small-size power pump according to the intended use inorder to respond to such societal requests.
In particular, Morita attached much importance to the design of thevehicle. The sticker drawn on the sides of the vehicle is designed tolook like a fire fighter battling a blaze to express the courage of firefighters.
In addition, the doors that open wide are designed to make use of thevehicle easier for the fire fighters and technicians, and assume thatdifferent types of emergency crews ranging from volunteer fire corps
members, who protect the safety of local residents, to professional firefighters may use the vehicle.

01
03

REPORT 2008
2006

TOPICS

Ceremony to commemorate the 101st anniversaryof foundation
Our company was founded on April 23, 1907, and this year wecelebrate the 101st anniversary of our foundation.
We are sincerely grateful for your generous kindness and support thathave enabled us to mark such a long history.
On May 30, we held a ceremony for the 101st anniversary of our
foundation, in which we also unveiled a new factory that has been built
in Sanda City, Hyogo Prefecture, to commemorate our new century.

Reception party remarks by the President ▲Ladder trucks demonstration ▲REPORT 2006
2008

02
04

TOP MESSAGE

Message from Top Management
We are glad that our shareholders are well and prospering.
We would like to express our appreciation for your continued supportof our company.
As we provide our business report on the 75th term results of ourcompany, we would like to first give you an overview of sales activities.

Overview of sales activities
In our current fiscal year on a consolidated basis, the Japanese
economy first enjoyed a mild upswing because of increased capital
investments and improved employment conditions backed by steadybusiness performances. However, the economic prospects grew lesscertain due to financial unrest triggered by the surge in crude oil andraw material prices and the sub-prime loan problem in the UnitedStates.
Despite such circumstances, the performances of the Disaster
Prevention Business, including the Pump Division, and the Industrial
Machinery Division fared well, and net sales of our Group increased¥4,764 million from the same period of the previous year to ¥46,357
million (up 11.5%). The operating income increased ¥228 million fromthe same period a year earlier to ¥2,324 million (up 10.9%).

The

ordinary profit increased ¥277 million from the same period of theprevious year to ¥2,653 million (up 11.7%). The current net income
decreased ¥270 million from the same period a year ago to ¥1,066
million (down 20.2%) partly because a ¥737 million impairment loss
brought about by the existing factory becoming idle due toconsolidation of pumper-related factories to the new factory in Sanda
City, Hyogo Prefecture. This was recorded as an extraordinary loss.

05

REPORT 2008

TOP MESSAGE● Overview by segment
蚪 Disaster Prevention Business（Millions of yen）
Net Sales
35,00030,00029,85331,26032,02827,67425,00020,00015,00010,0005,000
02005.3 2006.3 2007.3 2008.3

In the Disaster Prevention Business, net sales increased ¥4,353
million from the same period a year earlier to ¥32,028 million (up15.7%) owing to an increase in the number of ladder trucks, etc.
sold from the Pump Division, and operating income increased¥340 million from the same period a year ago to ¥1,871 million (up22.3%).

蚪 Environmental Business（Millions of yen）
Net Sales
20,00015,00014,722

14,51914,94913,07010,0005,000
02005.3 2006.3 2007.3 2008.3

In the Environmental Business, net sales increased ¥430 million
from the same period of the previous year to ¥14,949 million (up3.0%) due to the industrial machinery division including guillotinepresses and scrap presses achieving strong showings. However,
the operating income decreased ¥113 million from the same
period a year ago to ¥453 million (down 20.0%) because of adecrease in the sales of environmental sanitary vehicles from oursubsidiary Morita Econos Corporation.

REPORT 200806

TOP MESSAGE

Tasks to Be Addressed:
It is expected that the business climate will become even harsher andchange rapidly. Our company intends to aim at building a strong brandsupported by our customers by revisiting the basic manufacturing
principles:advancement

customer satisfactionoftechnologies

andrealizationofwhile responding to the rapid changes we

expect. The specific tasks we have to fulfill are as follows.
(1) Increase earnings from overseas businesses through expansion ofoverseas bases for production, sales and post-sale services.
(2) Strengthen the earning capacity of the existing businesses bytransferring and consolidating them to the Sanda Factory.
(3) Increase market share by launching highly value-added products.
(4) Increase the organizational capacity by cultivating humanresources and firmly establishing a performance-based wage system.
In addition, our company plans to reorganize the Group throughintroduction of a holding company system and spin-off of some of theGroup companies starting October 1 , 2008 in order to survive theintensifying domestic and international competition, achieve agile
management of the Group and increase earnings from our businesses.
Our Group will aim to further increase our corporate value by
reinforcing management and strengthening earning capacity.

We sincerely hope that our shareholders will provide us with further
support and guidance.

June 2008

07

Masahiro Nakajima, President

REPORT 2008

FINANCIAL HIGHLIGHTSFINANCIAL HIGHLIGHTSNet Sales

Ordinary Profit
Non-consolidated
Consolidated（Millions of yen）
50,00046,35745,41342,197（Millions of yen）
3,500
3,000

41,59240,000Non-consolidated
Consolidated
3,419

3,073
2,653

2,623

2,500
30,000 27,891

2,333

2,376

30,51130,0652,000

25,996

1,752
1,522

1,500

20,0001,000
10,000500
002005.3 2006.3 2007.3 2008.3

Net Income

Return on Assets（ROA）
Non-consolidated
Consolidated（Millions of yen）
2,500

2005.3 2006.3 2007.3 2008.3（Consolidated）

（％）
7

2,101

2,000

6.0

6

1,801
1,678

5.4

1,500

1,357

1,336
1,002

1,000

1,066

5
4.4

756

4

500

0

3
2005.3 2006.3 2007.3 2008.3

Shareholders' Equity Ratio（Consolidated）

（％）
60

53.4

2005.3 2006.3 2007.3 2008.3

Interest-Bearing Liabilities（Consolidated）（Millions of yen）
15,0009,850

10,000

52.3

50

4.0

8,182

50.2

7,312
6,230
46.5

40

5,000

0
2005.3 2006.3 2007.3 2008.3

2005.3 2006.3 2007.3 2008.3

REPORT 2008

08

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Summary
Consolidated Balance Sheets
Morita Corporation and Consolidated Subsidiaries
As of March 31, 2007 and 2008
Millions of yen

AssetsCurrent assets
Property, plant and equipment
Intangible assets
Investments and other assets
Total assets
Liabilities
Current liabilities
Long-term liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Additional paid-in capital
Retained earnings
Treasury stock, at cost
Total shareholders’ equity
Valuation and translation adjustments
Unrealized gains on available-for-sale securities
Deferred gains (losses) on hedges
Unrealized gains (losses) on revaluation of land
Foreign currency translation adjustments
Total valuation and translation adjustments
Minority interests in consolidated subsidiaries
Total net assets
Total liabilities and net assets

09

REPORT 2008

2007

2008

¥ 24,294¥ 25,408

27,211

29,170

161

289

7,498

5,587

¥ 59,165¥ 60,456¥ 18,248¥ 21,922

10,947

10,12529,19532,048

4,746

4,746

4,365

4,365

21,127

21,345(2,321)(2,496)

27,917

27,959

1,734

345

(4)

(0)

(4)

(244)

40

49

1,765

149

286

298

29,96928,408¥ 59,165¥ 60,456CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Income
Morita Corporation and Consolidated Subsidiaries
For the Years Ended March 31, 2007 and 2008
Millions of yen

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Other income
Other expenses
Income before income taxes
Income taxes
Current
Deferred

Minority interests in earnings of consolidated subsidiaries
Net income

2007

2008

¥ 41,592¥ 46,357

31,05435,301

10,537

11,055

8,441

8,731

2,096

2,324

1,037

879

632

1,384

2,500

1,820

1,105

877

47

(139)

1,152

737

11

16

¥ 1,336¥ 1,066
Yen

Per share of common stock
Basic net income
Diluted net income
Cash dividends applicable to the year

2007

2008

¥ 31.05¥ 25.1130.98−

20.00 *

10.00

*Includes 100th anniversary commemorative dividend of Yen 10.00

Consolidated Statements of Cash Flows
Morita Corporation and Consolidated Subsidiaries
For the Years Ended March 31, 2007 and 2008
Millions of yen

2007

2008

Cash flows from operating activities¥ 3,597¥ 1,057

Cash flows from investing activities(1,038)(2,972)

Cash flows from financing activities

(69)

982

Net increase (decrease) in cash and cash equivalents

2,489

(932)

Cash and cash equivalents at beginning of year

2,366

4,856

−

23

¥ 4,856¥ 3,947

Cash and cash equivalents of newly consolidated subsidiaries
Cash and cash equivalents at end of year

REPORT 200810

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statement of Changes in Net Assets(in millions of yen)

Morita Corporation and Consolidated Subsidiaries
For the Year Ended March 31, 2008
Shareholders’ equity
Commonstock

Balance at March 31, 2007

4,746

Additional
paid-in capital

4,365

Retainedearnings

Total
Treasury stock, shareholders’at costequity(2,321)

21,127

27,917

Amount of change
Cash dividends

(851)

(851)

Net income

1,066

1,066

Acquisition of treasury stock
Disposal of treasury stock

(0)

(177)

(177)

2

2

Reversal of reserve forland revaluation

240

240

Decrease due to changes
in scope of consolidation

(237)

(237)

Net changes other thanshareholders’ equity
Total changes
Balance at March 31, 2008

−
−

(0)

217

(175)

41

4,746

4,365

21,345(2,496)

27,959Valuation and translation adjustments
Minority
Unrealized Deferred Unrealized
Foreign interests in
Total
gains on
gains
gains
currency
net assets
available(losses)on translation consolidated(losses)subsidiaries
for-salerevaluation adjustments
securities on hedgesof land

Balance at March 31, 2007

1,734

(4)

(4)

40

286

29,969Amount of change
Cash dividends(851)

Net income

1,066

Acquisition of treasury stock(177)

Disposal of treasury stock2

Reversal of reserve forland revaluation

240

Decrease due to changes
in scope of consolidation(237)

Net changes other thanshareholders’ equity
Total changes
Balance at March 31, 2008

11

REPORT 2008

(1,388)

4

(240)

9

11

(1,603)(1,388)

4

(240)

9

11

(1,561)

345

(0)

(244)

49

298

28,408

NON-CONSOLIDATED FINANCIAL STATEMENTS

Nonconsolidated Summary
Nonconsolidated Balance Sheets
As of March 31, 2007 and 2008
Millions of yen

2007

2008

AssetsCurrent assets
Property, plant and equipment
Intangible assets
Investments and other assets
Total assets¥ 16,651
25,775129
9,288¥ 51,843¥ 18,057
27,562
171
7,350¥ 53,141

Liabilities
Current liabilities
Long-term liabilities
Total liabilities¥ 13,644
10,20523,850¥ 17,400
9,384
26,785

4,746
4,365
19,512(2,321)
26,303

4,746
4,365
19,657(2,496)26,272

1,699
(4)
(4)
1,690
27,993¥ 51,843

330
(1)
(244)
84
26,356¥ 53,141

Net assets
Shareholders’ equity
Common stock
Additional paid-in capital
Retained earnings
Treasury stock, at cost
Total shareholders’ equity
Valuation and translation adjustments
Unrealized gains on available-for-sale securities
Deferred gains (losses) on hedges
Unrealized gains (losses) on revaluation of land
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

Nonconsolidated Statements of Income
For the Years Ended March 31,2007 and 2008
Millions of yen

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Other income
Other expenses
Income before income taxes
Income taxes
Current
Deferred
Net income

2007¥ 25,996
20,226
5,770
5,016
753
1,720
788
1,685

2008
¥ 30,511
24,156
6,355
5,283
1,072
1,444
1,465
1,051

670
13
¥ 1,002

400
(105)
¥ 756

REPORT 2008

12

COMPANY PROFILE

Company Profile(current as of March 31,2008)

Overview
Inauguration of business: April 23, 1907
Establishment: July 23, 1932
Capital: ¥4,746,120,000
Osaka Head Office: 5-5-20 Shoji-Higashi, Ikuno-ku, Osaka-shi
Osaka
Tokyo Head Office: 3-25-31 Nishishinbashi, Minato-ku, Tokyo
Major lines of business
Pump Division
Manufacture and sale of aerial ladder trucks, chemical
pumpers, pumpers, other fire fighting-related vehicles andspecial vehicles
Disaster Prevention Division
Sale of disaster prevention equipment such as ABC dry
chemical fire extinguishers, and design, installation andmaintenance of disaster prevention facilities
Environmental Business Division
Manufacture and sale of recycle plants, waste treatment
facilities and industrial waste treatment machines

Group Companies
Morita Econos Corporation

Morita Technos Corporation

Morita Sogo Service Ltd.

Ueno Morita Ltd.

Morita UG Ltd.

Morita Engineering Corporation

ALUVO. Co., Ltd.

ENTO Co., Ltd.

Hokkaido Morita Corporation

Kagoshima Morita Pump Ltd.

Morita Toyo Corporation
Sichuan Morita Fire Safety Appliances Limited Company
Nanjing Chenguang Morita Environment Protection Science& Technology Co., Ltd
Morita Holdrich(Hong Kong) Company Limited
MORITA VIETNAM COMPANY LTD.

13

REPORT 2008

EXECUTIVES

Executives
Chairman & CEO

Toshio Shinmura

President

Masahiro Nakajima

Executive Vice President

Masaaki Onji

Managing Director

Eiji AsadaManaging Director

Yukihiro Maehata

Director

Kenichi Kitamura

Director

Kazuhiro Tsuchiya

Director

Fumikazu Hashimoto

Director

Kazumi Kawaguchi

Full-Time Corporate Auditor

Kyo Hirose

Full-Time Corporate Auditor

Kazunari Nishida

AuditorKazuyoshi Matsumura

AuditorKanji Masuda

Associate Senior Corporate
Executive Officer

Junji Inamoto

Corporate Executive Officer

Toshihiko Iwamuro

Corporate Executive Officer

Akira Koga

Corporate Executive Officer

Ryutaro Nakagawa

Corporate Executive Officer

Yukio Tanaka

Corporate Executive Officer

Nakatsune Nakano

REPORT 200814

Memorandum for Shareholders (notice on shares)
Business year: from April 1 to March 31 every year
Annual general meeting of shareholders: held in June every year
Reference date: Annual general meeting of shareholders: March 31 every year
Dividend at the end of term: March 31 every year
Interim dividend: September 30 every year
Other: specified date publicly announced in advance as necessary
Pubic announcement method:posted on the website of our company
http://www.morita119.com/kohkoku/index.html
Administrator of the shareholders list:
The Sumitomo Trust & Banking Co., Ltd.
4-5-33, Kitahama, Chuo-ku, Osaka-shi
Place of clerical office for the above:
Stock Transfer Agency Department, The Sumitomo
Trust & Banking Co., Ltd.
4-5-33, Kitahama, Chuo-ku, Osaka-shi(Post delivery address)
Stock Transfer Agency Department, The Sumitomo
Trust & Banking Co., Ltd.
1-10, Nikko-cho, Fuchu-shi, Tokyo, 183-8701(Phone number for inquiries)(Request for application form for address change, etc.) ＋81-120-175-417(Other inquires) ＋81-120-176-417
Internet website URL
http://www.sumitomotrust.co.jp/STA/retail/service/daiko/index.html
Agent for the above: Nationwide branches of The Sumitomo Trust &Banking Co., Ltd.
Stock exchanges: Tokyo Stock Exchange, Osaka Securities Exchange

For the latest IR information, please visit our website.

http://www.morita119.com

Osaka Head Office : 5-5-20, Shoji-Higashi, Ikuno-ku, Osaka-shi,
Osaka, 544-8585
Tel: +81-6-6756-0100
Tokyo Head Office : 3-25-31 Nishishinbashi, Minato-ku,
Tokyo, 105-0003
Tel: +81-3-5777-5777

http://www.morita119.com

This document is printed
using environmentallyfriendly soybean oil ink.